• Circle is considering issuing a stablecoin in Japan following new rules governing stablecoins that came into effect on June 1.
• CoinDesk Executive Director of Global Content Emily Parker breaks down the details.
• Japan’s revised Payment Services Act certifies stablecoins backed by legal tender as an “electronic payment method” and only licensed financial institutions can issue them.
Finance Circle Considers Issuing Stablecoin in Japan
Circle CEO Jeremy Allaire expressed interest in partnerships in the country, given that new rules governing stablecoins have come into effect on June 1. In an interview with CoinDesk Japan, Allaire said that if stablecoins become more widely used for cross-border trade, foreign currency transactions and global commerce, Japan will become an extremely large market.
Japan’s Rules Governing Stablecoins
Japan’s stablecoin bill makes it one of the first countries to establish a framework for the use of overseas stablecoins which Allaire considers “the most important thing the government and the Financial Services Agency have done.” The country’s Financial Services Agency moved to lift a ban on overseas stablecoins in December last year. Stablecoins must be pegged to the yen or other legal tender and guarantee holders the right to redeem them at face value. Only licensed financial institutions like licensed banks, registered money transfer agents and trust companies will be able to issue them.
Circle is interested in partnerships in Japan, which he visited last month. Circle recently obtained a Major Payment Institution (MPI) license in Singapore, which allows it to offer digital payment token services, cross-border remittance services and trading activities for certain tokens including bitcoin and ethereum among others across Southeast Asia countries such as Thailand and Vietnam.
Advantages Of Stablecoins
Stablecoins have advantages over traditional forms of money because they are easier to move around than traditional currencies due to their digital nature and are less volatile compared with other cryptocurrencies such as Bitcoin or Ethereum since they are tied to fiat currency exchange rates instead of being subject to fluctuations on crypto exchanges like Bitcoin or Ethereum would be when traded against other cryptos or fiat currencies . They also provide access to capital markets without needing a bank account or credit card since they can be bought with cash using peer-to-peer services like LocalBitcoins or Paxful which allow buyers from all over world buy cryptocurrency directly from sellers located anywhere around globe via various methods such as bank transfers , cash deposits , wire transfers etc .
Impact On Economy
This technology could potentially help boost economic growth by providing faster payments systems for international trade transactions , helping reduce fees associated with exchanging between different currencies , creating greater liquidity within global markets , facilitating access capital flows for entrepreneurs & businesses , providing secure storage solutions for digital assets & investments , implementing automated compliance procedures & fraud prevention measures etc . It could also make it easier & cheaper for people living outside established banking systems access financial services & products normally available only through expensive intermediaries .